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TIME WAITS FOR NO MAN... OR DOES IT?Private jets save time and are more fl exible – but only if you can afford them, right? Catherine Chetwynd explodes the myths surrounding this high-fl ying option
52 THE BUSINESS TRAVEL MAGAZINE
64-68 Private Jets.indd 58 6/25/13 09:27 AM
If there is one segment of the airline
industry that is misunderstood, it is jet
charter. Frequently classified as toys for
the boys or flagrant abuse of company
funds, the commercial imperative of hiring
aircraft seems to disappear in the outraged
ballyhoo attendant on the sight of an
expensively suited executive leaping out
of a Learjet and into a waiting car.
The industry is more mature in the US
than in Europe, with around 17,000
commercial aircraft in the sector, compared
to Europe’s 3,000. However, according to
the European Business Aviation Association
(EBAA), while business aviation in Europe
accounts for seven per cent of flights per
year, it generates nine per cent of business-
related revenues; and of the 88,800 city
pairs served by business aviation in Europe
in 2011, 96 per cent had no daily scheduled
connections. The sector employs 164,000
people and generates manufacturing
business worth ¤9 billion so, commercially,
it packs a punch.
Not only can those travelling by private jet
arrive at the airport ten minutes before
take-off, enjoy speedy customs clearance
(being partly pre-cleared) and take off as
booked, but they can also safely discuss
business with colleagues, knowing that
there is no risk that the passenger in front
works for a rival organisation. And if a
meeting overruns, the flight waits. In short,
you can go where you want, when you
want and with whom you want.
The time-saving argument is irrefutable:
“Money – the difference in price between
Private jets
THE BUSINESS TRAVEL MAGAZINE 53
The top 10 business aviation airports in Europe in 2012 by number of total fl ight movements
1. Paris Le Bourget 47,9142. Geneva 36,3953. Nice Cote d'Azur 29,3344. London Luton 25,7795. Moscow Vnukovo 25,3546. Zurich 21,6717. London Farnborough 20,3788. Milan Linate 20,2799. Vienna Schwechat 15,43410. Rome Ciampino 14,419Source: PrivateFly.com/WINGX-Advance
HIGH-FLIERSTOP JET DESTINATIONS
➔
64-68 Private Jets.indd 59 6/25/13 09:27 AM
54 THE BUSINESS TRAVEL MAGAZINE
flying commercial and private – is an infinite
commodity. People who are flying privately
have a skill and make lots of it,” says sales
and marketing director of broker Chapman-
Freeborn, Alex Berry. “But time is finite and
none of us knows how much we have got.
They are swapping an infinite commodity
for a finite commodity.“
And private jets come into their own when
flying into inhospitable areas. “They can get
in and out very quickly and we can organise
bodyguards on aircraft, on arrival or to
guard aircraft on the ground, so that no one
can tamper with it,” says managing director
of brokerage Vertis Aviation, Julian Burrell.
Enquiries for private aviation tend to fall
into four categories, according to HRG’s
director of industry and fare distribution,
Tony Berry: executive travellers; ad hoc
requirement for small groups travelling to
destinations not covered by scheduled
services; regular group movement such as
engineers travelling regularly between two
destinations, with prices benchmarked
against scheduled services; and crisis
management, including movement of
specialist personnel and equipment.
“If a ship costing $150,000 a day has
broken down and requires critical repair, it
may take a number of days to mobilise
crew, get them to a scheduled airport and
from there to the vessel,” says Berry. “We
benchmark that against putting a charter
aircraft into a convenient airport, the time
elapsed to get to the ship, plus the
possibility of carrying several tonnes of
equipment, which may be impractical on a
scheduled aircraft.”
Dispelling the myth that jet charter is
only for big-spending multinationals is
Adam Twidell, CEO of PrivateFly.com.
“The profile of the business customer is
changing. In 2006-7 the archetypal business
aviation user was in the finance industry.
Regulation and recession has changed that
dramatically, and now there is more of a
blend of private wealth, corporates and
luxury groups.”
Twidell continues, “SMEs and entrepreneurs
are using private jets as much as the big
corporations. They have the ability to
choose private aviation without adverse
criticism. They are also notably time-poor so
the allure of saving five hours on a return
trip to Europe really resonates.
“Post-recessional cost-consciousness has
accelerated customer demand for value and
transparency. There is also pressure on the
industry to market themselves differently,
demonstrating the efficiency benefits of the
private jet as a business tool, not as a luxury
status symbol,” adds Twidell.
Despite more widespread usage, the
market is relatively flat and remains sensitive
to the global economy – even for jet charter
specialist Victor, which is
bucking the trend with
impressive growth.
“Jet charter transactions
remain down from the
peak in 2009 and the
market projection remains
flat for 2013,” says Victor's
founder and CEO, Clive
Jackson. “Suppliers are
chasing a smaller number
of jet charter customers,
with the exception being
the BRIC countries (Brazil,
Russia, India and China), where flight
movements are up 12 per cent year on year.”
Commercial aircraft charter makes sense
for one manufacturing company with bases
in the UK and in France. It charters 50-seat
Embraer 145s for routes around Europe and
within France, plus two Airbus 319s for a
shuttle service between the UK and France.
“These are used for engineers, buyers,
finance people, and the idea is to get them
to France as early as possible. Given the
one-hour time difference, they have to get
up extremely early,” says the company’s
travel manager. “Sometimes, we can get
them there and back in a day and still get
five hours’ working time. It is run on
business criteria.”
Chartering is the most common way to
access jets and Gama Aviation provides
charter, management, maintenance, TMC,
manufacturing and IT services. “We can
have a customer airborne within 90 minutes
of their calling to request a charter and that
can allow them to get ahead of the
competition,” says the company's
commercial manager, Paul Cremer.
Choice of aircraft depends largely on
length of journey, number of passengers
and need for cabin crew. Helicopters are
more sensitive to weather conditions and
“they tend to have a low speed, a very
limited range and they
can be noisy and
uncomfortable in
comparison to jets,” says
director of Hunt & Palmer,
Jamie Martin. However,
they are ideal for short
distances and for getting
in and out of tight spaces.
Departure point is
another consideration and
the choices are many. In
and around London alone,
there are London City
Airport, Luton, Stansted, Heathrow and
Gatwick, Battersea heliport, plus Biggin Hill,
Manston and RAF Northolt.
“The great advantage of charter in its
simplest form is that you make a phone call,
get a price, book, pay, fly and forget about
it,” says chief executive of London Executive
Aviation (LEA), Patrick Margetson-Rushmore.
“The majority of people use business
aircraft charter only four or five times a year,
so the other options don’t make financial
➔
How do charter costs vary by aircraft? Example prices for an overnight return from London Luton to Paris Le Bourget: From £900 per head in a Cessna Mustang (£3,600 total charter)Seats: 4 Flight time: 48 minutes From £800 per head in a Citation XLS (£6,400 total charter)Seats: 8 Flight time: 41 minutes From £780 per head in a Legacy 600 (£10,100 total charter)Seats: 13 Flight time: 39 minutes Source: PrivateFly.com. Prices subject to aircraft availability at time of booking.
AIRCRAFT COSTGUIDELINES
CO
URT
ESY O
F VIC
TOR
“ SMEs and entrepreneurs are using private jets as
much as the big corporations. They have the ability to choose private aviation
without adverse criticism ”
64-68 Private Jets.indd 52 6/25/13 09:27 AM
Private jets
sense.” Other options are ownership and
fractional ownership.
Typically, owners do not want to run the
operations side of owning an aircraft. “An
operator gives them bulk discounts on
insurance and fuel, an office that operates
24/7 and areas such as fuelling, hotels and
catering are dealt with,” he says.
Group chairman and CEO of Ability Group,
Andreas Panayiotou, is an owner of a
Challenger 300 which seats nine. “It is a
fantastic business tool. We have hotels in
Sicily, Liverpool and Scotland. I can leave for
Scotland at 8am, have a four-hour meeting
and be back between 5pm and 6pm, which
would otherwise take two days out of the
office,” says Panayiotou.
“LEA manages the aircraft for me and
employs the staff, pilot and so on. I fly it 100
hours a year and LEA charters it for 400
hours, which covers the costs near enough.”
There are advantages to using a broker,
who picks aircraft from a worldwide pool to
match clients’ requirements. Included in this
is impartial advice: “One of the reasons we
are trusted is because we are willing to give
honest feedback,” says
Chapman-Freeborn’s Alex
Berry: the company will
walk away from clients
who are hell bent on doing
something ill advised.
Fractional ownership is
more common in the US
than in Europe. It is
offered by companies such
as NetJets and Flexjet.
With NetJets Europe,
users buy a fraction of a
particular type and size of
aircraft, giving access to all
aircraft in that category.
Contracts are a minimum of five years,
fractions start at 1/16th or 50 hours for a
year and customers lose any hours not used
by the end of their contract. There is a
monthly management fee to cover fixed
costs such as pilots’ salaries and aircraft
insurance, and an occupied hourly rate
covers landing fees, fuel,
handling etc.
For those who fly less
often, Jetcard allows users
to buy a block of hours
(minimum 25) in a
category of aircraft per
year, also on a use it or
lose it basis. Aircraft
availability is guaranteed
within 24 hours, against
ten hours for fractional
ownership – or one and
a half for jet charter.
“Users get one name
and one telephone number and NetJets
knows your preferences and has aircraft
worldwide,” says LEA’s Margetson-
Rushmore. “But if you do a lot of day
trips it could work out quite expensive.”
However, if there were any doubt as to
the value of business aviation, proof is in
the fact that scheduled airlines such as
bmi, Lufthansa and Qatar Airways are
offering jet services, and the latter two
view the option as complementary to their
premium services.
Given time savings, convenience and
versatility of chartered jet services, it is not
difficult to work out that they can quickly
justify the investment.
Ford Motor Company used air charter to fl y engineers into Craiova in Romania from January to September in 2012 to prepare a plant for the launch of the B-Max.
“We used Jet 2 and Germania and hired Boeing 737s with 148-150 seats to get groups of people there on Monday at 1pm and bring them back on Friday at 4pm, so they were back for the weekend,” says travel manager EMEA for Ford Motor Company, Stephen Swift. “It would have been a three-day week if they had travelled commercially, and as soon as we fi lled more than 125 seats, it made commercial sense.” The aviation manager for the now-defunct airline Ford Air still works for Ford and he negotiated terms that allowed the company to pay monthly, rather than upfront, which gave it more fl exibility.
Swift also had to do a lot of work with the airport to ensure there was fuel, de-icing facilities and more, and this was in addition to the charter company’s own recce.
“Essentially, we reinvented Ford Air over four to six months,” says Swift. “We organised the airline and hotel in plenty of time, had the booking system up to speed and fl ew the project team from Southend to Cologne to Craiova. We refuelled at Cologne because the runway at Southend had not been lengthened, so the plane could not take off with a full tank.
“The business case has to stack up. If we had not got the numbers of engineers to make it work, we would not have done it,” adds Swift.
MAKING THE CASE FOR PRIVATE HIRE
“ The great advantage of aircraft charter in its
simplest form is that you make a phone call, get a price, book, pay, fl y and
forget about it ”
CO
URT
ESY O
F PRIVAT
E FLY
CO
URT
ESY O
F CH
APM
AN
FREEBO
RN
THE BUSINESS TRAVEL MAGAZINE 55
64-68 Private Jets.indd 53 6/25/13 09:27 AM